Two contrasting messages; “cryptocurrencies are the best performing assets in the past decade” and “cryptocurrency investments are Risky!”. Same topic, different assertions, both of them correct. While many have made life changing wealth through cryptocurrency investments, a lot more have a very different story to tell. While I’m not an advocate of cryptocurrency as just a ‘money making’ scheme, losing out on any investment isn’t pleasant regardless.
Came for the technology, stayed for the money…and vice versa. Majority of participants in this space are clearly interested in cryptocurrency investments’ ability to generate mind blowing returns in a very short period of time. Those 500% gains in 48hrs isn’t something you see anywhere else; in crypto, it happened very frequently. I mean, who wouldn’t want to turn $8,000 into 5billion dollars in just a few months?
But more frequently than not, investors suffer huge losses on their cryptocurrency investments. This is partly due to the volatility of cryptocurrency prices; investors have a share of the blame anyways. Stepping into a space like this, the first thing to note is the fact that everything is time bound. Price rises for a while, it also falls for a while…even your influencers’ shill tweets don’t last forever; it takes a dump to get them deleted, lol.
Well, that’s by the way. It’s exciting to be in a space where constant fluctuation is a norm, it’s the volatility that makes the money; and drains it too. Playing safe is a virtue. Going all in could work; but most times, the story is different. Even when you have invested ‘what you can lose’, it’s still unpleasant to see it crash. In this space, crashes are usual…and harsh.
Informed investing could save you a lot.
One popular mistake is ‘chasing pumps’. It’s human nature to chase trends and the fear of missing out is a huge drive. Investors rush to these hot shots with hopes of reaping from the next possible gains.